US Taxpayer Body Argues Against Steel, Aluminum Tariffs

by Mike Godfrey, Tax-News.com, Washington

14 December 2017

The National Taxpayers Union (NTU) has called upon the US Department of Commerce to halt its investigation into steel and aluminum imports, claiming that imposing tariffs would be "an economically inefficient solution to a narrow problem."

President Trump instructed Commerce to launch a comprehensive investigation into steel and aluminum imports in April 2017 on the grounds of national security.

"Core industries such as steel, aluminum, vehicles, aircraft, shipbuilding, and semiconductors are critical elements of our manufacturing and defense industrial bases, which we must defend against unfair trade practices and other abuses," he said in a memorandum to Secretary of Commerce Wilbur Ross on April 27.

The investigation is being conducted under Section 232, and will determine whether the importation of steel and aluminum is in such quantities or under such circumstances as to threaten to impair the national security.

"Activating Section 232 under the guise of national security would be a misuse of policy intended for genuine emergencies, break longstanding precedent, and adversely impact global alliances that we rely on to keep Americans safe from foreign threats," said NTU in an open letter to Ross published on December 12.

"Providing the military with dependable metal is important. However, the amount of steel and aluminum used for defense is a relatively small portion of the total demand."

The defense industry consumes roughly one percent of aluminum and three percent of steel imports to the US. According to NTU, the majority of steel imports come from US allies including Canada, the EU, Mexico and Japan. China, which has a more tense trade relationship with the US, accounts for just four percent of imported steel and six percent of aluminum.

"Restricting commerce through tariffs would increase costs for existing manufacturers who rely on lower-priced steel and aluminum imports. Any change in the delicate supply chain will increase the final cost of production, which would, in turn, raise costs for consumers," said NTU. "Restricting imports of steel or aluminum via Section 232 would only encourage America's trading partners to use similar tactics to block the exports of US goods, open the door to trade battles, and discourage imports of needed goods."

In an interview with Bloomberg Television in September, Secretary Ross noted that the decision on steel tariffs would be delayed until after the passage of the Republican tax bill.

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